Elan Corp. and Transition
Therapeutics Inc. said their experimental Alzheimer’s disease
treatment will progress into the last stage of human tests even
as the drug failed to meet an interim study’s main goals.

Elan, Ireland’s largest drugmaker, and Transition will
continue to test the drug, ELND005, in patients with mild to
moderate forms of the disease, the companies said in a
statement. They will also “explore all strategic, operational
and global options” for the therapy, they said.

In December, Dublin-based Elan and Transition, based in
Toronto, halted two arms of the study after nine deaths and
“serious adverse events” occurred for patients on higher
doses. The findings, announced late yesterday, were based on 166
patients who took the lowest dose of the drug or a placebo for
as long as 18 months. The therapy failed to significantly
improve patients’ mental status or daily living activities, the
main goals of the trial.

“The market is pleased they are moving it into phase 3,”
Ian Hunter, an analyst at Goodbody Stockbrokers, said in an
interview. “And that they’re looking for a partner to help
bring it through the system to share the risk. It has potential.
Alzheimer’s involves very large, very expensive trials.”

Paying Off Debt

Elan also announced today that it will pay off about $500
million in outstanding debt that was due to mature in November
2011 and November 2013. First-half adjusted earnings before
interest, tax, depreciation and amortization increased to $82.4
million from $13.1 million in the prior-year period, Elan also
said today.

An estimated 18 million people worldwide have Alzheimer’s
disease, and those numbers are expected to reach 34 million by
2025, according to the World Health Organization. The disease is
the most common form of dementia in older people. There’s no
cure for Alzheimer’s, although some drugs such as Eisai Co.’s
Aricept temporarily ease symptoms.

Elan and Transition’s study results were from the second of
three phases of clinical trials generally required to gain U.S.
regulatory approval for a new drug. No timetable has been set
for announcing the next steps in ELND005’s development, the
companies said.

One Death

In the patient group receiving a lower-dose of ELND005, one
death was reported compared with none among those who received a
placebo, the companies said. Serious side effects considered to
be drug-related were 2.3 percent in the ELND005 group and 2.4
percent in the placebo group, the companies said.

Falls, depression and a “confusional state” were among
the side effects reported in at least twice the rate of patients
who took the experimental drug compared with those on the
placebo, the companies said.

An independent committee reviewing safety concluded that
“a causal relationship between the deaths and drug cannot be
determined,” Elan and Transition said.